Spot Bitcoin ETF Options – How U.S exposure is set to soar after CFTC’s notice

• CFTC’s latest notice seemed to pave the way for Spot Bitcoin ETF Options being greenlighted
• Worth looking at its potential impact and how Bitcoin Options Open Interest has grown so far in 2024

Bitcoin ETFs have done a lot in terms of clearing the road for institutional liquidity so far this year. However, ETFs are not stopping there, with a recent CFTC notice revealing that Bitcoin ETF Options may be in the pipeline too.

The Commodity Futures Trading Commission (CFTC) issued a staff advisory on Friday, with respect to Bitcoin ETF Options. The official press release also offered some regulatory clarity. It revealed that the new Options will be regulated by the U.S Securities and Exchange Commission (SEC).

As far as their listing dates are concerned, no official date was revealed. However, Bloomberg’s Senior ETF Analyst Eric Balchunas noted that the SEC clearance is the second largest regulatory hurdle. He also revealed that a green light from the Options Clearing Corporation would be the last remaining step, before Bitcoin ETF Options finally hit the market.

Assessing the impact of Spot Bitcoin ETF Options

The biggest impact of this development is that Spot Bitcoin ETF Options will fuel BTC exposure in the United States. Especially in a legal setting. It could potentially boost liquidity in the market by attracting more institutional traders.

The whole idea behind Spot Bitcoin ETF Options is to lend exposure to BTC, without having to hold the underlying asset. The Options will also pave the way for more speculation in the market. A potential outcome could be more volatility and amplified price swings.

The additional volatility could be a double-edged sword because it could influence both the bulls and bears.

How is the state of Bitcoin derivatives so far?

Bitcoin bulls have been extremely active so far in November. This activity was characterized by a surge in spot and derivatives volumes.

Demand for Bitcoin in the derivatives segment hit its highest levels in history recently. In fact, its recent levels were higher than the levels seen during the peak of the previous bull run.

Source: Coinglass

The total Bitcoin Options Open Interest peaked at $38.75 billion on 14 November. For context, this was more than double the amount of Open Interest towards the peak of the previous bull run in October 2021.

Also, the level of Open Interest was less than $5 billion towards the start of 2024. This puts into perspective just how much the Bitcoin derivatives segment has grown so far this year. In fact, this figure can be expected to rally even higher once the Spot Bitcoin ETF Options are launched.